News that banks are looking to further tighten their lending criteria and the ever reducing number of new mortgage approvals raises hopes that the Bank of England will cut interest rates. (more…)

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As expected, the Bank of England’s Monetary Policy Committee have kept interest rates on hold at 5%. With inflation at 3.3% against a target of 2% this was the only decision the MPC were likely to take, despite incresing economic concerns and fears that the UK could be entering a recession. If there are further signs of a downturn, the Bank must be prepared to act quickly and cut rates.

The Bank of England’s Monetary Policy Committee (MPC) has kept interest rates on hold at 5%. The decision was expected by many commentators  as the MPC do not have the same aggresive approach as the US Fed. Also the threat of rising inflation, particularly on fuel and food, is every present.

However the economy is continuing to slow, with the housing sector bearing the brunt. Consequently interest rates are expected to be cut in June by 0.25% with further cuts coming over the next 12 months to take rates down to 4.25%. Good news for those with tracker mortgages, but the question whether these reductions will be passed on to fixed rate customers still remains.

The Bank of England (BoE) has today cut interest rates by o.25% to 5%, the third 25 basis point cut since December 2007. The move comes as the Bank looks to mitigate the impact of the credit crunch and the slowndown in the property sector.

Many of the big lenders have already stated that they will pass on the rate cut in full by reducing their standard variable rates (SVR). Whilst this is great news for those with mortgages linked to the SVR or the Bank of England base rate, it does not paint the full picture. (more…)

Lehman Brothers has issued a report that states the UK faces a one in three chance of going in to recession during the next two years. Global financial issues caused by the credit crunch, higher mortgage rates and reduced availablility of mortgage deals will finally lead to a slowdown in consumer spending. Adding up all these factors means the prospect of a recession won’t go away. (more…)

Following a meeting between Mervyn King, Governor of the Bank of England and the Chief Executives of Barclays, HBOS, HSBC, Lloyds TSB and RBS, it is understood that Mr. King is considering allowing the use of a wider range of assets to stand as collateral. Importantly this includes mortgages.

Mr. King had been reluctant to do this as he did not want to be seen to be bailing out Banks that had acted irresponsibly in the current economic climate. Whilst considering relaxing the criteria, the Bank has agreed to make an additional £5bn a week available to the Banks until the next interest rate meeting on the 9th April.

The extra funding was much needed as it was three times oversubscribed. This very fact indicates there is still significant pressure within the banking system.